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Blow to wind as finance minister McGreevy pulls plug on tax incentive
1 February 2003
Ireland's finance minister Charlie McCreevy has pulled the plug on a tax incentive that encouraged investments in small wind schemes. In his December 2002 budget, McCreevy singled out "passive investors" in electricity generation or supply schemes, ending their ability to write-off income against their investments. Tax relief and capital allowances will only be allowed against income from the electricity business, not against any other income of the individual, the minister said. He claims this "anti-avoidance measure" will save the country up to EUR 10 million a year over the next five to eight years. The move comes as a blow to small wind developers, claims Aidan Forde from wind farm development company Saorgus Energy. "At least three small wind schemes have had their financing unravelled and the commerciality of their schemes called into question," he says. In the same budget, McCreevy signalled his intention to introduce a carbon tax at the end of 2004 to help Ireland meet its obligations to reduce greenhouse gas emissions under the Kyoto Protocol. "Given the many implications of such a tax, both environmental and economic, there will be full consultations with interested parties on the design of the tax and a reasonable period is being allowed for its effective introduction," says McCreevy.
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